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Parental scheme helps small firms: Hockey

Federal Treasurer Joe Hockey is sticking by the government's commitment to a more generous paid parental scheme despite declaring an end to the age of entitlement.

Soon after delivering a speech in Sydney that touched on the need to end government handouts and tackle an entitlements mentality, Mr Hockey said Australia needed to improve workforce participation.

"The way we have designed our paid parental leave scheme is, for the first time, small business is on a level playing field with the public sector ... and with large businesses who can afford to pay," Mr Hockey told the Lowy Institute.

The coalition's proposed scheme offers mothers 26 week's leave on full pay, capped at $75,000, which will be partly funded by a 1.5 per cent levy on the nation's 3200 largest corporations.

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"Some people say that's generous, I don't," the treasurer said.

The existing paid parental leave introduced by the former Labor government pays the minimum wage and is totally funded through the budget.

Mr Hockey said there has been massive growth in the creation of small businesses.

"I still see small business as the engine room, so let's not hold them back."

Shadow treasurer Chris Bowen said the treasurer used his address to trot out more platitudes on the "age of entitlement" - a theme he first touched on in a speech in London two years ago when in opposition.

"Yet he stubbornly remains committed to a new and unfair $5.5 billion a year (paid parental leave) welfare scheme," Mr Bowen told AAP.

"The Treasurer likes talking tough to those doing it tough, but flinches when it comes to things which hurt the Liberal party's supporters."